Used Car Lemon Laws – State and Federal
Consumer Protection for Used Auto Sales and Vehicle Warranty
Oct 18, 2009
Federal lemon laws provide consumer protection against defective products. The laws were written primarily to protect consumers against new car defects, as well as other new defective products. There is however provisions in the U.S. law for used vehicles.
The federal laws are somewhat general and are not specific as to what constitutes a used car lemon. Since the laws are somewhat generalities, U.S. law relies on individual states to interpret what constitutes a used vehicle lemon.
Federal Lemon Law – The Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act is a federal law that protects consumers against defective products. The act is based around product warranty. Since the act is based around product warranty, the federal law has special provisions that govern used vehicles that come with an implied warranty. If a used car has an implied warranty, defects covered by the warranty must be addressed. The seller has three options to address the defects.
- Repairing the defect
- Replacing the product
- Refund of the purchase price, less depreciation
Used Car Federal Lemon Law and Implied Warranty
If a company is the business of selling used vehicles, warranty information must be stated as part of the buyer’s guide. The buyer’s guide must be displayed on the side window or side mirror of every used vehicle for sale. Even if the vehicle is sold “as is” and there is no applicable warranty that comes with the car, the buyer’s guide must state “no warranty”.
When a used car dealer sells the vehicle, they should state in writing that the vehicle does not come with a warranty. Extended used car warranties may also apply to applicable defective components. If the vehicle is purchased from an individual, the car is considered sold “as is” and lemon laws do not apply..
State Used Car Lemon Laws
Since the federal laws don’t go into specifics as to what constitutes a lemon, state laws are generally more specific. The problem generally has to be a defect for a covered component under the implied warranty. State vehicle laws usually specify what constitutes a used lemon as follows.
- Problems arise within a specified time and/or mileage of the used car purchase.
- The amount of repair attempts to correct the same defective condition.
- The vehicle is out of service for a specific amount of days due to a covered defect.
Used lemon laws can be different from state to state. Some states may not have laws that are specific to used vehicles. Certain states follow the same rules applicable to new car lemon laws. Some states don’t allow used car dealers to sell vehicle “as is”. In these states, used car dealers have implied warranties that are mandatory.
Since state laws vary, it’s best to find out the applicable laws for the state the used vehicle was sold in. If the defect and repair attempts fall within state guidelines, the used car owner should contact the selling dealer for resolution. If the consumer is not satisfied with the dealer’s resolution, a lemon law attorney should be consulted.
Source:
ftc.gov
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